Whole Life Insurance

What are The Key Features of Whole Life Insurance Policy?

Let us see the features and benefits of life insurance whole insurance policy that you should know before buying the best whole life insurance policy in India.

• Affordable premiums: Whole life policies offer insurance cover with affordable quotes for lifetime. It is a cost-effective way to safeguard lifetime protection.

• Family Support: The policyholder’s whole life policy will work as a financial backup for the children and the grandchildren after the policyholder's demise. Thus, whole insurance is a great insurance solution for wealth creation and future planning so that one can provide financial security and a good lifestyle to their family.

• Sum Assured: Whole life insurance plans offer a large sum assured that can help your loved ones manage their day-to-day expenses and long term financial goals in case of your absence.

• Add-on Riders : One more benefit is that you get to increase your plan coverage with rider options for a comprehensive long term protection.

What are the Benefits of Buying Whole Life Insurance

• Whole Life Coverage
  These plans provide coverage against death for the policyholder’s whole life, i.e., till 99 or 100 years of age. This guaranteed life cover (sum assured) is paid to the nominee of the policy during the policy term in case of the policyholder’s death. The payout amount can help your family fund your child’s higher education or future wedding, or can be used to secure your spouse's life post-retirement.

• LevelPremium
  The premium rate of a whole life insurance plan is fixed and does not increase or decrease throughout the term period of the policy. So, suppose the policyholder has to pay a premium of Rs. 2,168 per month for a specific policy. In that case, he/she will continue to pay the same premium regularly for the entire premium payment term

• Protection for Life
  Whole insurance is designed to provide life protection to the family of the assured during the policy term. It is done in the form of payment of a guaranteed sum assured along with bonuses, if any, in the case of the policyholder’s unfortunate demise.

• Death Benefit
  In the event of the unfortunate demise of the life assured during the tenure of the policy, the death benefit is paid to the nominee. The death benefit is paid as a total sum assured amount to the beneficiary/nominee of the policy by the insurance company, provided all the premiums are duly paid. This benefit amount will be paid along with the accrued bonuses (if applicable).

• Tax Benefits
  The policyholder can claim life insurance tax benefits as per the prevailing tax laws under section 80C on the premium paid towards the full life insurance policy. Moreover, the death claims are also tax exempted under section 10(10D) of ITA 1961.

Why Should You Buy a Whole Life Insurance Policy?

Here is why you should buy the best whole life insurance policy in India:

Whole Life Insurance Cash Value

A cash value life insurance policy offers a cash value benefit that allows customers to gain wealth creation benefits and save for the future. A certain portion of every premium payment goes into insurance protection, whereas the other is invested to build wealth. The cash value accumulation is faster in the early years of the policyholder’s life compared to the later years, as the portion of the premium that goes into insurance cover increases every year.

Whole Insurance Death Benefit

The exact amount payable on death for a full life insurance policy is usually specified in the policy documents. It may change in the following instances: if the policy is eligible for dividend payments, unpaid policy loans, and additional riders, like accidental death benefit or waiver of premium riders. You can also select the suitable payout option for whole life insurance policy, like lump sum, monthly income, or lump sum + monthly income.

Debt Repayment in Your Absence

In case you have outstanding loans and debts like home loans, business loans, student loans, or car loans, the full life insurance payout can help your family pay off the remaining loan, rather than being burdened with the outstanding amount in your absence. 

Fulfill Financial Goals and Needs

Your family can use the whole insurance payout amount to take care of their financial goals and needs like paying for the child’s future wedding, funding their business endeavours, securing the spouse’s retirement, or any other such goals.

Liquidity in Case of Emergency

In case of a financial crisis or emergency, a full life insurance plan can help you receive urgent funds with its loan facility. A life insurance whole life policy allows you to receive loans against the cash value accumulated during the policy term. As you claim a loan, the death benefit amount decreases accordingly, and you can revive the original sum assured by duly paying off the whole life policy loan amount.

How Does Whole Life Cover Insurance Work?

Whole life insurance plans remain active from the purchase date until the policyholder reaches 99 years of age. The plan offers death benefits in case of an unforeseen event during the policy term and it secures the financial security of your loved ones.
The life assured pays a fixed premium amount to the insurance company throughout the term. The coverage of the Whole life insurance plan continues till the time all premiums are paid in full and on time. The coverage gets discontinued upon completing the policy term i.e., when the policyholder reaches 99 years.

How Does Whole Life Cover Insurance Work?

Let us understand how whole life insurance example works:

Neeraj, a 30 year old non-smoking male, bought a whole life cover insurance from Policybazaar to financially secure his loved ones. He earns Rs. 12 Lakhs per year and, thus, chose the best term insurance plan for 1 Crore with a policy term of 99 years. To enjoy the coverage benefits of the whole life policy, he would have to pay a monthly premium of Rs. 2,168 for the entire policy term. In case he suffers an unfortunate death during this tenure, the insurer will payout the sum assured of 1 Crore to his nominees, which will help them take care of their financial needs.

What are the Different Types of Whole Life Insurance Policy?

Whole life insurance plans are categorised into following types:

1. Limited Payment Whole Life Policy

   Under this option, if you choose a limited payment whole life insurance policy, you are required to pay the premium for a limited time during the policy tenure. In most cases, you can pay the amount for the first 10/20 years and continue to get covered for 99 years. The premium rates for these plans are slightly higher, but the total savings on premiums would be higher than a regular life insurance plan payment. 

2. Single Premium Whole Life Policy

   Under this plan option, the entire premium of the policy is paid in one go or as a lump sum payment at the time of policy purchase. Since the premium is paid all at once, no other premium payments have to be made throughout the policy tenure.

3. Modified Whole Life Insurance

   If you choose a modified whole life policy, you pay different amounts at varying intervals of the policy tenure. In this, the premium rate is comparatively lower at the inception of the term and increases gradually with time. However, regardless of the premium rate, the plan’s insurance coverage and the benefits remain the same for the whole term.

4. Variable Whole Life Insurance 

   A variable whole life policy offers life coverage for the whole policy term, ensuring your family members are protected against any financial uncertainty in case of your absence. In addition to this, this plan also helps in meeting your investment objectives by investing your money.

What is the Difference Between Term Life Insurance And Whole Life Insurance?

Let us briefly understand the difference between a whole life policy and a term insurance policy.

Whole Life Insurance Eligibility Chart

Who Should Buy a Whole Life Insurance Plan?

• Individuals who want to create a financial cushion for their future generations.

• Individuals who want to secure their family financially and want to create a corpus in the long run.

• Individuals who want to accumulate wealth for retirement should consider buying this life insurance policy.

• Individuals who want to save on their yearly taxes.

What Are The Whole Life Insurance Riders? 

Listed below are some of the rider options available with the life insurance whole life policy:

1. Waiver of Premium Rider

   Within this rider, if the policyholder is diagnosed with a critical illness or is permanently disabled due to an accident, the future whole life policy premiums will be waived off and the policy will remain active until the policy term ends.

2. Accidental Death Benefit Rider

   Under this rider, the insurer will pay the additional rider sum assured to the nominee in case of the policyholder’s accidental death during the policy term. This payout can help the family take care of their monthly expenses and other financial obligations.

3. Accidental Total Permanent Disability Rider

   In case of total or permanent disability caused due to an accident, this rider will provide the rider sum assured to the policyholder. This payout can be used to pay any of the medical costs required for the suitable treatment of the disability.

4. Critical Illness Rider

   On the diagnosis of a critical illness during the policy term, this rider can help take care of the medical expenses that might incur due to any critical illness that is included in the plan, including life-threatening illnesses like an organ transplant, any severe heart ailment, etc. These diseases could lead to a temporary or even a permanent loss of regular income, and the rider sum assured can help take care of these expenses in a time of financial crisis.

5. HospiCare Benefit Rider

   Under this rider, if the policyholder is hospitalized in general or in the ICU ward, a fixed percentage of the basic sum assured is paid to help the policyholder take care of the medical bills and treatment costs.

6. Terminal Illness Benefit

   With this rider, the insurer will payout the entire or a part of the sum assured in case the policyholder is diagnosed with a terminal illness during the policy term. In case the rider pays a part of the sum assured at terminal illness, the remaining part will be paid to the nominee at the policyholder’s unfortunate demise.

How To Buy Whole Life Insurance Plan From Policybazaar?

Here are the steps to buy this life insurance whole life policy from Policybazaar:

Step 1: Go to the official Policybazaar website and look for the page about whole life insurance.

Step 2: Give your name, contact information, gender, and birth date.

Step 3: Choose 99 or 100 years as your maturity age, or click "Switch to whole life."

Step 4: Type in the details about your job, annual income, education, and how much tobacco you smoke or use.

Step 5: Pick the best whole life insurance policy in India and pay for it in the way you want to finish the process.

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